Have money to put towards debt, where should we put it?

If you are upside down in your home,I would put the money there so you have some safety built into your home.

that's exactly what i would do. and the extra money would be paying on the credit cards.

Just to play the sides here, I've heard that paying the smaller amounts, like the credit card (assuming that is a smaller amount) can be very satisfying and improve your focus on gettind debt free. So if the money is large enough and the cc debt is small enough get it done and out of the way. If it really won't make a huge dent either way, then go for the house....

I understand that strategy poko but if ur upside down on ur house i'd pay that FIRST and try to get some equity back in ur home!! Also, lots of people will pay off their credit cards and in no time have them charged back up so u end up in the exact same position...
:(
Ang

Another excellent point. I've just heard about debt strategy and little victories can be huge to your self esteem. I don't know much about being upsidedown on house payments, I'm a renter, I was just trying to play the other side.

That is the problem with credit cards, is another 'emergency' (sometimes actual sometimes not so much) comes up and you are right back where you were....

Buy paying the smaller amounts first refers to multiple debts that range from say 300.00 that you would be paying 30.00 per month on and larger ones with a similar payment that is not lowering the principal. By paying off the little ones it allows you to double and triple and quadruple up on the big one. Putting a big dent in it. The mortgage is a different story. This is your biggest investment and should be looked at as an investment rather than a debt.

It's always a good idea to have equity in ur home.... especially if u need to sell it quickly!
Ang

In a "normal" market, I would say pay on the equity. In this market, I would say pay the credit card. I am $75k upside down on my house due to the declining property values and its still falling and I am on time on my mortgage payments. Unless I had enough to pay off the whole loan, I would put the $ into my credit cards.

But this is an equity loan she/he's speaking of.... I think that's diff than ur mortgage... But i also agree with Frogman, this is ur MOST important investment!
Just my opinion though,
Ang

Then perhaps I read the question wrong....

just my "2-cents" here guys! Just saying what I would do.

We don't know the particulars here as far how much and how long. If the market is as soft as it is where I live I would try to get out from under that equity loan so you have equity back in your home. I don't know how much your windfall was or what interest rate you are paying and lots of other info and I am by far not an expert it just seems to make sense to me to want to regain equity. Then you could use that extra money that was going to your home equity loan to start paying off that credit card. The result would be no more credit card and equity in your home!

Knowing where they live would be good info..good point frog. My area is the 5th largest in foreclosures right now in the US and tied for 3rd in declining property value. I have a home equity loan but even paying it off wont put the equity back at the rate its declining. :(

Wow Volley that sure sucks!! I'm sorry to hear about that! :(
And i'm thinking she/he musta posted another thread cuz i remember more details given in the post!!
Ang

Sucks is an understatement...its is a nightmare.

Did you recall where they lived Ang?

Actually i don't think they said but i think the home equity loan is what got them upside down... (and the market falling, of course)
Ang

And ya know i guess it does depend on where u live cuz here the housing market is actually thru the roof and it's definately a seller's market!! My house was appraised recently and has gone up double since last appraisal about 5 years ago!
Ang

wow...lucky for you!

Well i guess but i'm NOT selling or am i getting an home equity loans or such... My goal is to pay this off in the next couple years and have NO mortgage!
:D
Ang

Anyone in a positive market today should consider themselves lucky... :D

Well I'm glad we got a good debate going here, and we have views from the different sides. I know nothing about houses, and was merely putting in information that I had heard somewhere. Thanks Frog for clearing up the jumble of information that I also knew little about!
And volley! what a mess with the housing market! Crazyness....

We can all agree to disagree here. I understand the victory of paying off smaller bills. The point I was making in my post is shelter is a basic essential and homes are secured loans. If you must bankrupt you can still walk away with your home unlike an unsecured credit card.

good point cajun.

Its good that we have different perspectives here...I have been on both sides...TON of equity all the way down to negative equity in a matter of 5 years. :(

appraisals across America have dropped so much since Ang's last post on Nov 19th ==very scary--doesn't matter where you live market is definitely not positive! Merry Christmas!